Lawsuits offer people an opportunity to have their dispute heard and resolved by an unbiased judge. Sometimes, the judge grants a default judgment when one party to a lawsuit fails to do something needed. For example, a business served with a summons must appear in court within a named time. A business who fails to appear within that time means the opposing party can ask the judge to grant a default judgment.
When a judge grants a default judgment, only one side of the dispute can present evidence. Because the judge hears one side of the case, default judgments usually give the party appearing in the case the relief that person was seeking.
To avoid default judgments against your business, your registered agent plays a critical role.
What is a Registered Agent?
The purpose of a registered agent is to provide a legal address (not a PO Box) within that jurisdiction where there are persons available during normal business hours to facilitate legal service of process being served in the event of a legal action or lawsuit. Generally, the registered agent is also the person to whom the state government sends all official documents required each year for tax and legal purposes, such as franchise tax notices and annual report forms.
Your registered agent plays an important role: ensuring that lawsuits, court documents and notices are brought to your attention promptly, so you can act on them and avoid default judgments, fines and penalties. For this reason, it’s worth taking the time to make sure you choose an agent that’s appropriate for your business needs.
Should You Be Your Company’s Registered Agent?
Naming an employee or owner to act as registered agent for your business can save money on registered agent fees and can give you the comfort of knowing that legal documents will go directly to you.
However, acting as your own agent has numerous downsides, including:
- Served with a lawsuit at your place of business, in front of employees and customers.
- If you act as registered agent, your name and address will be part of your business’s public records on file with the state. This can be a concern if you have a home-based business or want to keep your information private.
- Registered agents receive documents, notices, solicitations and junk mail. If you don’t want to deal with this mail on an ongoing basis, you might prefer an outside agent
- If your business changes locations or if your agent leaves the company, you need to update your registered agent information with the state. During a move, small business owners seldom remember to do this.
- If you spend a significant amount of time outside the office during the workday, you should not designate yourself as registered agent because you are not available during normal business hours.
- If you do business in multiple states, you can only act as registered agent in the state where you are physically located. Many businesses with a multi-state presence find it easier to hire a company that can provide registered agent services nationwide.
Selecting an Outside Registered Agent
Your registered agent’s responsibilities don’t end with accepting lawsuits and other documents on your behalf. The agent is also responsible for getting the documents into your hands promptly. If your agent neglects to do this, you can lose a lawsuit through default or you can be subject to court sanctions for ignoring a subpoena.
For this reason, it’s important to choose an agent that is reputable and has a track record for providing registered agent services. Don’t name your cousin just because he’s agreed to do it for free. Many states’ business filing departments maintain a list of companies that provide registered agent services in that state.
Choosing Agents of Delaware as Your Registered Agent
Agents of Delaware provides full registered agent service. Our office is open during normal business hours to satisfy the requirements of the state. The following items packaged, stamped, and forwarded on to you at no expense as part of our registered agent service:
- Correspondence from the Delaware Secretary of State.
- Legal Service of Process. In the event process is served upon your business, we email a copy of the service to you within 24 hours and mail you the original.
- If you require special services, we arrange to send you a copy via registered mail, certified mail, or any other courier service, for the requisite fees.
We provide a local referral resource in Delaware. Should you need a local attorney, accountant or another service provider in Delaware, call us for a referral. We believe you should know as much as possible about how Delaware corporations are formed and what is required to maintain your corporation in good standing. We direct you to the information that you need to help prevent penetration beyond the corporate veil. Remember, a sound corporate structure is the best defense for your personal assets.